The ministry of petroleum and natural gas may allow private oil and gas companies to explore shale resources in India

Indian oil ministry may allow private oil and gas companies to explore shale resources at their existing blocks

India’s ministry of petroleum and natural gas may soon allow private oil and gas companies to explore shale resources at their existing blocks in the BRIC country, The Economic Times reported. The proposed unified exploration policy is expected to allow private players to explore shale oil and gas, along with coal-bed methane (CBM) in blocks owned by them.

The oil ministry proposed to extend lease period of blocks owned by private companies, if they wish to explore shale oil and gas at their blocks. However, the proposition is applicable to the blocks where the lease agreement will expire in two years.

Indian oil companies which are registered members of Association of Oil and Gas Operators (AOGO) have expressed concerns regarding the proposed lease extension.

The news report quoted an AOGO member as saying: "If two years, why not two days? What is the purpose of the government? Is it to encourage exploration or restrict it? India has no proven shale oil and gas and the restriction will discourage private investments.”

According to the oil ministry, guidelines on lease extension are to avoid misuse of unified exploration policy. "Cut-off date is a must so that private operators do not give the excuse of shale exploration to extend their lease periods. Blocks where the lease period will expire in less than two years will be re-auctioned after the expiry of the licence under the unified exploration policy."

The Indian government in September approved the shale gas exploration policy. The policy was divided into two phases. The government has already implemented the first phase by allowing national oil companies to explore shale oil and gas from land blocks allotted to them in their PEL/PML lease. The second phase involves offering shale oil and gas blocks to other companies via CCEA approval.